ECO-4 Lecture 17: Introductory_Economics_17
Document Summary
Perfect competition the entry of new firms into the industry. Many firms, each selling identical product, many buyers & no restriction on. Many firms & buyers = informed about prices of products of each firm in. = most extreme form of competition industry. Large # of firms compete by making similar but slightly different products. Product differentiation : making product slightly different from product of competing firm. Differentiated product does not mean different products (ie. different brands of potato chips, ketchup) What matters = consumer thinks it"s different. Market structure in which small # firms compete. Might produce identical products (e. g. coke & pepsi) Or might produce differentiated products (e. g. boeing & airbus aircraft) Market structure where there"s one firm that produces a good/service w/ no close substitutes & firm = protected by barrier preventing entry of new firms. (e. g. in some places phone gas, electricity, cable television = local monopolies) (e. g. visa/microsoft back then)
